Budget: Coronavirus relief for SMEs and employees

UK Chancellor Rishi Sunak delivered a bold response to the coronavirus crisis in his 11 March budget, with a raft of measures to support SMEs (small and medium-sized enterprises) and their employees.

Outlining a possible scenario where up to 20% of the UK work force could be off work, Sunak said he was providing “a bridge for businesses to cope with the temporary effect” of the outbreak.

Businesses facing problems with cash flow due to coronavirus (Covid-19) – struggling to pay salaries, meet bills or buy stock - will be able to apply to a temporary Coronavirus Business Interruption Loan Scheme, with banks offering loans of up to £1.2m to support SMEs.

Government will guarantee those loans, covering up to 80% of losses with no fees.

Sunak also announced two further measures to support businesses through the tax system.

For all SMEs with a rateable value below £51,000, including restaurants, bars, shops, nightclubs and other hospitality venues, business rates will be abolished for one year.

“These could be some of the hardest hit,” said Sunak, with the measure meaning around half of UK businesses will not pay business rates in 2020.

The smallest businesses, those currently eligible for small business rates relief and which already pay no businesses rates, will be provided with a £3,000 cash grant per business, supporting 700,000 of the UKs smallest companies.

On employees, businesses with fewer than 250 employees will be refunded in full by government for statuary sick pay for staff off work for up to 14 days.

In addition, statuary sick pay will be available from day one, and for all that must isolate, even if they are not showing symptoms. Self-employed and those in the gig economy will also be supported.

Sunak said that the “extraordinary measures taken today” represented £7bn to support the self-employed, businesses and vulnerable people in the face of the coronavirus crisis - part of an overall £30bn support package for the UK economy and health service.

There was support for pub companies and owners too, with the business rate discount for businesses raised from £1,000 to £5,000, to help this already stressed sector.